General Average
- As is well known, maritime law deals with a special property - Vessels. Vessels move through the seas, transporting cargo and people from one place to another. During the voyage of any vessel, unplanned and unforeseen dangers may arise that endanger the vessel, the passengers and the cargo on board, or endanger the ship's continued journey to its destinations. Sometimes it is necessary to "sacrifice" property, cargo, or parts of a ship, for the common safety of the vessel and cargo, or to invest special resources to ensure the continued voyage of the vessel and the arrival of all cargo to its destination.
- Since the dawn of the history of maritime trade, the practice has been accepted that in such cases, when there is danger For vessels and cargo, all stakeholders (vessel owners and cargo owners) will participate in the risk created (see Rule (A) York-Antwerp Rules, (amended 2016); Heftza Claim 32931-09-18 The Ship CHEM ANTARES S.A N. CHEM ANTARES S.A, paragraph 18 (12/2/2019);Eagle Terminal Tankers, Inc. v. Insurance Co. of U.S.S.R. (Ingosstrakh), Inc., 637 F.2d 890, 894-95 (2d Cir. 1980); William Tetley, The General Maritime Law - The Lex Maritima, 20 Syracuse J. Int'l. L. & Com. 105, 128-129 (1994); Richard Cornah, The Road to Vancouver - The Development of the York-Antwerp Rules, J. Int'l. Maritime. L. 1 (2004)).
The concept that all stakeholders in the continuation of the ship's voyage will participate in the "risk" caused (consisting of the cost of the cargo or property sacrificed in order to save the ship and its cargo, or the special resources required to save the ship and its cargo) is based on a number of principles; first and foremost, the principle of fairness. In other words, the concept that it would be fair to share the risk with those who donated their property or resources for the benefit of the public (see In re Star of Hope, 76 U.S. (9 Wall.) 203 (1869); Strang, Steel & Co v. A Scott & Co, 14 App. Cas. 601, 6 Asp. MLC 419 (1889)); The requirement for participation is also based on the principle of preventing enrichment, since all interested parties who did not "sacrifice" their property for the benefit of the public benefit and enrich themselves at the expense of the sacrificer (compare to the provisions of section 5 of the Enrichment and Non-Legal Enrichment Law, 5729-1969, as well as the case of In re Star of Hope above).
- The division of "risk" among all stakeholders is also intended to encourage and incentivize cargo owners and vessel owners, to risk to the point of sacrificing their property, or to invest in investments for the benefit of the public. Knowing that the "risk costs" will be shared with other stakeholders increases the chances of saving the ship and its cargo. Establishing a participation provision increases the certainty of participation in the cost of risk and thus also strengthens the efficiency in finding solutions to secure the ship and its cargo (See Matter Strang, Steel & Co The above; Jolien Kruit, General Average, Legal Basis and Applicable law (2017); Hugo Tiberg, Lowndes & Rudolf on the Law of General Average and the York-Antwerp Rules C. J. Q. 189-190 (1994); Birkley v. Presgrave, 1 East 220, 228 (1801) (Lawrence J.)).
- In order for all stakeholders to participate in the cost of the "risk", the owner of the vessel or the captain declares an event that establishes a cause of "general damage" (in the present case, the shipowner declared this on May 27, 2023). The declaration can be based on the "sacrifice" of property, or on the investment of special expenses required to save the ship. In the present case, the declaration was based on the expenses for "flooding" the ship and carrying out the temporary repairs.
- After the declaration of an event of general damage, there is a need for a mechanism to share the risk among the ship's owners.. As early as the 19th century, the York-Antwerp Rules were enacted (York-Antwerp Rules). These rules, which are commonly adopted in transportation agreements, have been updated and changed over the years. The latest version is the version from 2016 (See York-Antwerp Rules (amended (2016)).
- In accordance with the mechanism set out in the rules, after the declaration, coordinators are appointed for general damage (General Average Adjustors). The role of the coordinators is to examine and assess the "damage", and to determine the share of each stakeholder (cargo owner or vessel owner) in the participation (contribution). In order to ensure the payment of the general damage participation fee, the ship owner may delay the release of the cargo or allow their release subject to the receipt of letters of undertaking, and this was done in this case as well (the letters of undertaking were attached as Appendix 4 to the Claim Addendum). A discussion of the claims regarding the validity of the declaration and the division of the "damage" between the owners of the cargo is not required in the current proceeding, and these are expected to be clarified, if necessary, only after determining the coordinators.
Defining the Disputes
- As we have seen above, the plaintiffs petitioned for a judgment declaring that they are not obligated to pay the fees for participation in the general damage, but at the hearing they agreed to place the claim only for the alternative remedy, i.e., a claim against the ship for indemnification for any payment that they would be required to pay as participation in the general damage. As such, it remains to be clarified whether the jurisdiction clause in the undertaking agreements applies to the indemnity claim, and whether this court has jurisdiction to hear the indemnity claim. We will first examine the issue of substantive jurisdiction and then the claim of delay of proceedings due to the foreign jurisdiction clause.
Substantive Authority to Hear the Indemnity Claim
- The question of the jurisdiction of the Maritime Court to hear the claim of its object and the claim of Gabra has been discussed at length in many decisions of this Court, and there is no need to repeat everything that has been written (see, for example, my decision of February 13, 2018 in file 60578-01-18). Fish - Conclusion in Tax Appeal et al. v. The Ship Black Eagle (22/10/2019); I have decided /from 17/9/2024 inHeftza Claim 69395-11-21 Poliva BTax Appeal N' The Ship ""Ruby T (17/9/2024)). As has been clarified more than once, the jurisdiction of the Maritime Court derives from the Admiralty Act of 1840 and 1861, as well as fromShipping (Vessels) Law.
- The plaintiffs claim that their claim for indemnification for participation fees that they must pay as part of the division of the risk of general damage, establishes jurisdiction for the court to hear in accordance with the provision of section 6 of the Admiralty Act of 1840, which grants the court jurisdiction to hear a claim for compensation (Salvage), to the provisions of section 6 of the Admiralty Act of 1861, which confers jurisdiction on any claim for damage caused to cargo (damage done to the goods), and accordingly To the section 41(7) 30Shipping (Vessels) Law Dealing with the Claim "[...] For damage to cargo and passenger belongings transported in it".
- The plaintiffs' reliance on the provisions of section 6 of the Admiralty Act of 1840 is liable to be rejected. This section instructs as follows:
The High Court of Admiralty shall have jurisdiction to decide all claims and demands whatsoever in the nature of salvage for services rendered to or damage received by any ship or sea-going vessel, or in the nature of towage, or for necessaries supplied to any foreign ship or sea-going vessel, and to enforce the payment thereof, whether such ship or vessel may have been within the body of a county, or upon the high seas, at the time when the services were rendered or damage received, or necessaries furnished, in respect of which such claim is made.